Update On The Site Revamp

Snapchat’s 188 million daily active users (“DAUs”) imply the company definitely has something the public wants. The questions remain, “Can it go from developing a cool app to creating a sustainable business model?” Snapchat’s CEO Evan Spiegel tried to answer that question several months ago when he revamped the site to separate (1) photos and videos generated by friends from (2) content from publishers and influencers. The goal was to unlock additional growth.

In March, Snapchat ran an incendiary ad that made reference to pop star Rihanna and domestic violence. She took to Facebook’s (FB) Instagram to complain about the ad and voice her grievances with Snapchat. It created a public relations nightmare for the company, and SNAP’s market capitalization has fallen by over $12 billion since. That may have been the first sign the site revamp – meant to amplify engagement and goose growth – may have gone awry.

The second sign may have been reflected in Q2 2018 DAUs. They grew 9% Y/Y, but fell 2% sequentially due to lower frequency of use among Snapchat’s user base. In a leaked memo earlier this month, Spiegel admitted the company rushed the redesign, and may not have given itself enough time to test it. Read more: